VA Health Care:

Better Procedures Needed to Maximize Collections From Health Insurers

HRD-90-64: Published: Apr 6, 1990. Publicly Released: May 4, 1990.

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Pursuant to a congressional request, GAO reviewed whether the Department of Veterans Affairs (VA): (1) collections from health insurers exceeded health care costs; and (2) had effective procedures to identify insured veterans and bill insurers and collect amounts owed.

GAO found that: (1) VA collected only about one-third of the health care costs for medical services it provided to insured veterans; (2) VA failed to identify veterans admitted for inpatient care who had private insurance policies; (3) two-thirds of VA medical centers failed to verify administrative and medical records or contact employees about insurance coverage; and (4) some medical centers missed billings because internal controls were inadequate to detect billing errors and notify staffs of veterans discharged. GAO also found that: (1) some centers did not bill for any outpatient care, which amounted to $1.6 million during the first 6 months of fiscal year 1988; (2) VA did not have adequate resources available to collect all health care costs from insurers; and (3) medical centers would not commit the resources needed to collect the costs unless they received a portion of the collections.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: P.L. 101-508 included language which authorized the Medical Care Cost Recovery Fund. VA deposits all collections into this working capital fund and uses a portion of the funds to meet collection expenses.

    Matter: Given the substantial benefit to the government possible through maximizing insurance collections, Congress should ensure that VA has the resources necessary to fully implement its recovery efforts. If adequate resources are not available through the budget process, Congress should consider amending 38 U.S.C. 629 to allow VA to keep a portion of the amounts collected from insurers to defray its administrative costs.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: VA has issued requirements that all medical centers bill third-party insurers for outpatient care. In addition, the agency has provided training to all relevant staff on improved procedures for identifying and billing insurers.

    Recommendation: The Secretary of Veterans Affairs should ensure that all medical centers bill insurers for outpatient care they provide to insured veterans. In addition, the Secretary should ensure that each medical center has effective procedures for: (1) identifying all veterans with health insurance; and (2) billing insurers for all episodes of inpatient and outpatient care provided to insured veterans.

    Agency Affected: Department of Veterans Affairs

  2. Status: Closed - Implemented

    Comments: P.L. 101-508 provided the funds needed to identify and bill insurers.

    Recommendation: The Secretary of Veterans Affairs should ensure that all medical centers bill insurers for outpatient care they provide to insured veterans. In addition, the Secretary should ensure that each medical center has sufficient resources to fully implement its identification, billing, and collection procedures.

    Agency Affected: Department of Veterans Affairs

 

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